Pao and Nazre had a "brief intimate relationship" in 2006,
according to Pao's trial brief. Pao alleges Nazre retaliated
against her at Kleiner after she ended the relationship.

Nazre was married during the relationship, but Pao thought
he would leave his wife, Lane said.

When Pao came to him and disclosed the relationship, Lane asked
her what she wanted to do.

"I thought that it should be investigated," he
said. "I thought that it should be responded to, but
that it was up to her."

Lane said Pao wanted to continue working at Kleiner, and thought
Nazre should stay on as well.

"Both of them had stressed that they did not want to leave
Kleiner Perkins," he said. "My singular goal was to achieve that
if that's what they wanted."

Although Lane tried to create an atmosphere where both Pao
and Nazre could continue working at the firm, he was skeptical
about the prospects of that working out.

"You can't put the toothpaste back in the tube," he
said.

Lane suggested Nazre be inclusive with Pao and
over-communicate with her while they worked together in the
firm's green investment group. He also suggested Pao and Nazre have a
one-on-one lunch to discuss their continued working
relationship.

"I thought the human tendency would be for them to go in
their corners and try not to work together," he said. "That is
impractical at a firm our size."

Pao later moved from the green group to Kleiner's digital
group. Alan Exelrod, Pao's attorney, claimed that was because Pao
no longer wanted to work with Nazre.

"Two very different incidents"

Lane also testified about an incident involving another
female partner, Trae Vassallo,
who testified last week that Nazre sexually harassed
her. In late 2o11, Vassallo came to Lane with her
complaint about Nazre.

Though Vassallo's claim came
after Pao's relationship with Nazre, Lane sought to draw a
distinction between the two.

"I viewed these as two very different incidents," he
said. He said not
immediately launching an investigation Vassallo's claims was a
"mistake."

Last week, Vassallo testified Nazre had invited her to a dinner
in New York to introduce her to someone that would help one of
her ventures, but that person never showed up. After the dinner, Nazre came to Vassallo's
hotel room door in a bathrobe and slippers. Vassallo told Nazre
she wasn't interested. "I eventually pushed him out and closed the
door," she said.

According to Vassallo's testimony, when told Lane about the New
York incident, he said "you should be flattered" in jest, and
asked her what she wanted him to do.

But on the stand today, Lane agreed with Pao's attorney, Alan
Exelrod, that the firm should have immediately launched an
investigation into Vassallo's claim. "I made a mistake," he said. "It was my
mistake."

Lane said he held off on launching an investigation at
Vassallo's request.

"I was concerned about Trae," he said. "I asked Trae if she
would like me to start a formal investigation. She said
no."

Lane also said he didn't want to lose Nazre as a partner in
December 2011. But Nazre's termination was accelerated when
Vassallo submitted a letter to the firm's partners outlining what
had happened in New York.

Kleiner then decided to launch an investigation into
Vassallo's claim that resulted in Nazre's dismissal from the
firm.